It's true what they say about how life changes in a second, where one is happy and settled one moment and the next moment one is alone and grappling with tragedy. The worst-hit in any tragedy are children because they are entirely dependant on the family's elders for their wellbeing. A sudden lack of income can spell doom for any family.
If this scenario scares you , it is time to consider choosing a term insurance
plan for the sake of your family's future. However, deciding to do so is only half the job well done. The main task here is picking the best term insurance that will rightly meet your family's future needs.
How can you do this? Take a look at these 4 steps to choosing the best term insurance plan:
What is the need for term insurance?
Selecting a suitable term life insurance is the best way to safeguard your family against uncertainties in the future. You are present in their lives today and able to finance all their dreams but what happens in the future when you are absent and the family desperately needs an income? Not only does term insurance pay all the important expenses, but it also repays unpaid liabilities and takes care of children's education costs. This way, the family can consolidate itself in your absence. You can also use a term premium calculator to calculate the premium of term plans and life coverage online.
How much term insurance do I need?
Selecting the best term insurance plan entails understanding future anticipated expenses and the amount required to cover them. The sum assured of a term plan could be quite high, but it must be high enough to finance your family's future requirements comfortably. How much money is needed for the future? Break your expenses down to- Monthly expenses, house maintenance costs, children's education costs, children's wedding, unpaid debts and emergency expenses. Multiply this number by 10. Now add the future inflation ratio to it. The figure you now arrive at is the amount of term insurance your family needs in your absence.
How to choose the best term insurance plan?
Choosing a term insurance is very simple but selecting the best term insurance plan requires effort. Look for a reputed insurance provider with an excellent claim settlement record. The insurer must have a hassle-free claim settlement process. Also, most insurers today allow customers to purchase a term plan online. Since the premium payable on term insurance is quite low, insurers may not insist on a medical check-up prior to completing the term plan purchase process.
How will my loved ones get the term money?
Talk to your parents and partner about the chosen term insurance plan and how it benefits them. More importantly, describe the claim settlement process and how they must file the term plan claim when the time comes. One of your family members would have to intimate the insurance company about your death through a sales officer by providing them with a written intimation & a copy of the death certificate issued by the concerned government organisation. Keep the insurance documents in a safe place that these family members can access when needed.